‘We’re on track’
Minister of Finance, Winston Jordan
Minister of Finance, Winston Jordan

– Finance Ministry says steps being taken to establish SWF

– welcomes direct engagement with partners

THE establishment of a Sovereign Wealth Fund (SWF) is a designated priority of the government, one which demonstrates the administration’s commitment to good governance, transparency and accountability.

US Ambassador, Perry Holloway.

This was noted by the Ministry of Finance, which says it welcomes direct engagement with its partners. The ministry was at the time responding to an Op-ed penned by US Ambassador to Guyana, Perry Holloway, earlier this week.

On Tuesday, Ambassador Holloway stressed the need for a strong and transparent SWF even as he noted that Guyana is poised to be a very rich country in the region with considerable revenue streams in the future generated from the petroleum sector.
The Ministry of Finance while appreciating the ‘spirit of the Op-ed’ listed the SWF as a priority of government and it emphasised that the administration and people of Guyana will decide on its tenets. “The suggestions contained in the Op-ed may give the impression that the GCRG and, by extension, the Ministry of Finance, under whose remit the drafting of the legislation for the SWF falls, has not made significant progress on this important piece of legislation. That impression is misinformed,” the ministry stated.

The ministry noted that the foundation for the establishment of the SWF began since 2016. It said this was announced more than a year ago at the opening of Guyana’s National Seminar on Preparing for First Oil, which was facilitated by Chatham House of London. At that forum, it was noted that Minister of Finance Winston Jordan made clear the Government’s intention to develop a fund to govern the use of petroleum resources as a key legislative priority. The ministry stated that Minister Jordan highlighted the objectives of the fund and those are: to advance critical development and investment needs within the country through the national budget as well as to address issues of stabilisation of the economy.

Another objective is to ensure savings were made to guarantee inter-generational benefits from the extraction of this finite natural resource.
“Those objectives reflect a comprehensive framework that will guide the prudent management of future oil revenues for the benefit of current and future generations, in keeping with the government’s agenda,” the Finance Ministry said.

GREEN STATE
The Finance Ministry stated that the government’s investment expenditure will be driven by the Green State Development Strategy (GSDS) – the country’s national development plan – and, by the development priorities articulated and implemented through the National Budget, which has an established consultation cycle of its own. It was noted that the development of legislation to govern the SWF is being supported by the Commonwealth Secretariat.

The Finance Ministry while highlighting that the legislation will be laid before Parliament by the end of 2018, noted that a green paper on the subject will be published this year and consultations will occur subsequently.

Noting that Guyana is ahead of many countries in the establishment of the fund, including oil-producer Norway which established its fund years after first oil, the ministry stated that the move to create the fund “demonstrates the government’s commitment to good governance, transparency and accountability, by ensuring that a legislative framework is in place to safeguard our national patrimony, prior to the commencement of oil production.”
The Ministry of Finance said it welcomed direct engagement with its partners and values the comments from bilateral and multilateral partners on the draft content of the SWF and welcomes further engagement and support. It called, however, for caution to be exercised in pronouncement of national priorities, given the existing challenges of managing expectations and avoiding the Dutch disease.

 

 

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